The US leader took another swipe at the military alliance just days after he threatened to pull out unless leaders in Europe committed more money to defence.
In an interview with Fox News, Mr Trump raised the prospect of a major conflict breaking out if Nato sent troops to defend a small member like Montenegro.
The Balkan nation is the newest member of the alliance having joined last year, and with just 620,000 citizens, it is one of the smallest members in terms of both population and military size.
Nato rules state that if any one of its 29 members come under attack, the remaining 28 are obliged to come to its defence, and Montenegro has sent a small number of troops to Afghanistan to support the Nato mission there.
But asked by Fox News anchor Tucker Carlson why the US should send soldiers to aid the likes of Montenegro, Donald Trump said: “I understand what you’re saying, I’ve asked the same question.
“Montenegro is a tiny country, with very strong people. They are very strong people. They are very aggressive people.
“They may get aggressive, and congratulations – you’re in World War 3.
“But that’s the way it was set up.”
Donald Trump clashed with Nato leaders at a major summit last week after he demanded members pay their fair share.
Members of the alliance are supposed to invest two percent of their GDP on defence, though the majority currently spend far less than this target.
Mr Trump has long complained of the spending situation and questioned why the United States should be forced to come to the aid of countries which refuse to properly fund their militaries.
Before meeting with Nato leaders last week, he tweeted: “Presidents have been trying unsuccessfully for years to get Germany and other rich NATO Nations to pay more toward their protection from Russia. They pay only a fraction of their cost. The U.S. pays tens of Billions of Dollars too much to subsidise Europe, and loses Big on Trade!”
The only nations which have met the two percent GDP spending target are the UK, the US, Lithuania, Latvia, Greece, Estonia, Romania and Poland.
Following Mr Trump’s comments on Montenegro, Republican Senator John McCain condemned the president’s attitude.
He said by questioning whether the US should have to defend smaller Nato members, the commander-in-chief was “playing right into Putin’s hands”.
Nato was set up in 1949 to protect Western Europe, the United States and Canada from Soviet aggression.
Article 5 – the provision which Mr Trump referred to and requires Nato allies to come to the defence of one of its members – does not apply if the Nato state is the aggressor.